Rebel shareholders won parity for their shares but were forced to sell them after blocking the £100m sale of Engine Group to Lake Capital, PRWeek can reveal.

The group, unhappy that the terms meant they would have to sell their shares in the business and accept a lower value per share than current employees, were offered an improved deal to seal the acquisition.

Engine needed 75 per cent of shareholders to accept its offer for the deal to go through and Lake Capital was forced to extend its deadline by a week in order to reach an agreement with the rebels, despite initially rejecting demands.

Phil Andrews, a former chief operating officer of Engine, was among the rebel shareholder group who between them controlled 29 per cent of Engine’s shares and were able to block the deal.

Andrews told PRWeek: "We came to an agreement. They increased the price to give us parity, which is what we were after, so we agreed to it as of yesterday."

However, Andrews said the rebel shareholders were still forced to sell their shares and were not given the opportunity to retain them in the new entity, which had been a previous demand.

He said: "It was a cash-only deal but everyone is happy with that and it’s been resolved to everyone’s satisfaction."

This morning Engine announced that the deal would go ahead "very shortly" after 97 per cent of its shareholders signed up to it.

Andrews said he could not account for the remaining three per cent but that all of the rebels who controlled the 29 per cent block had signed up to it.

He added: "Some people may have been abroad or could not be reached but our blocking group all signed up for it."